A New Year has begun, and once again, the earnings season is almost upon us.
This round of earnings is more crucial than most as many companies have their fiscal years ending on 31 December.
Hence, investors will get to witness an entire year’s financial results, rather than just a quarter’s or half year’s.
For project-related companies, measuring year-on-year results are a better way to gauge the quality and consistency of the business.
And certain businesses may only pay an annual dividend, which means income-driven investors can look forward to receiving some money in their pockets soon.
We highlight three REIT earnings that could include interesting updates and nuggets of information on their respective property sub-sectors.
OUE Commercial REIT (SGX: TS0U)
OUE Commercial REIT, or OUECR, owns seven properties across the commercial and hospitality sectors in both Singapore and Shanghai with assets under management (AUM) of S$5.8 billion as of 30 June 2022.
OUECR will be releasing its fiscal 2022’s second half (2H2022) and full year (FY2022) earnings after the market closes on 30 January.
During its third quarter (3Q2022) business update, the REIT reported a 1.7% year on year increase in revenue to S$59.5 million.
Net property income (NPI) had inched up 4.4% year on year to S$48.3 million.
The REIT’s distributable income, though, fell by 13.3% year on year to S$26.2 million due to higher interest expenses and lower income support for its OUE Downtown Office property.
Things could be looking up, though.
Back in 3Q2022, S$900,000 of rental rebates were extended to Lippo Plaza’s retail tenants because of China’s COVID-zero policy in Shanghai.
With China easing up on its restrictions and opening up the country’s borders, OUECR can also ease up on these rebates.
Revenue per available room (RevPAR) for the REIT’s hospitality segment also jumped 15.5% year on year in 3Q2022 to S$262.
Investors can look forward to better numbers for this division as the fourth quarter saw higher levels of tourism and air travel with the continued reopening of borders.
Earlier this month, OUECR also announced the reopening of its new 446-room Orchard Wing for Hilton Singapore Orchard.
Although this reopening will not be captured in FY2022 and 2H2022’s results, investors can look forward to management’s commentary on how this reopening can boost the REIT’s rental income further.
Mapletree Pan Asia Commercial Trust (SGX: N2IU)
Mapletree Pan Asia Commercial Trust, or MPACT, has a portfolio of 18 commercial properties spread out across Hong Kong, China, Singapore, Japan, and South Korea.
These properties have a total net lettable area of 11 million square feet and are valued at S$17.1 billion as of 31 March 2022.
The commercial REIT will release its fiscal 2023’s third quarter (3Q2023) results after the market closes on 31 January.
For the first half of fiscal 2023 (1H2023), MPACT paid out a distribution per unit (DPU) of S$0.0494, up 12.5% year on year.
The REIT’s gearing stood at 40.1% as of 30 September 2022 and it had a low all-in cost of debt of 2.44%.
Looking ahead, investors will be interested to know how the REIT’s occupancy rate is holding up as a possible recession looms over the economy.
Its key retail asset in Hong Kong, Festival Walk, should also see higher tenant sales and footfall as restrictions were gradually eased in the later part of last year.
The REIT manager may also provide an update on the progress of the ongoing asset enhancement initiative (AEI) at VivoCity mall and its plans for acquisitions and other AEI for MPACT.
CapitaLand Ascott Trust (SGX: HMN)
CapitaLand Ascott Trust, or CLAS, is a hospitality trust with 95 properties spread across 44 cities in 15 countries.
Total AUM as of 30 June 2022 stood at S$7.6 billion.
CLAS will release its FY2022 earnings before the market opens on 30 January.
With the recovery in air travel and more tourists travelling across the globe, investors will be curious to know if these trends boosted CLAS’ financial numbers.
Back in 3Q2022, the hospitality trust had already reported an 88% year on year surge in portfolio revenue per available unit (RevPAU) to S$132.
The jump in tourist numbers will surely further bump up RevPAU and occupancy rates for the fourth quarter.
Investors should also be interested to know how CLAS’ recent S$318.3 million acquisition of assets in five countries has improved its financial profile.
With interest rates on the rise, the hospitality trust should also provide a sensitivity analysis on how its DPU may be negatively impacted by higher finance costs.
Investors should feel reassured that CLAS had three-quarters of its loans on fixed rates and a low cost of debt of just 1.7% as of 30 September 2022.
Not sure which REIT to put your money in? Use our 7-step REIT checklist to find one that fits into your retirement plan. Checklist is inside our latest FREE report “Singapore REITs Retirement Plan”. Click here to download it now.
Disclaimer: Royston Yang does not own shares in any of the companies mentioned.